This invention is concerned generally with the art of magnetic ink encoding, for example, magnetic encoding of the dollar or numerical amount for which an individual check or other instrument is written, or magnetic encoding of a zip code on a mail piece. More specifically, the check or other instrument or mail piece may be encoded at the time a person writes a check or instrument or prepares an item for mailing.
Every year billions and billions of checks are written. With rare exceptions when the payee bank "deposits" the check to the payee's account in the payee's bank, the depository bank must have an employee visually read the amount of the check and "key in" and cause to be printed on the lower right hand corner in magnetic ink, the amount of the check. Thus far this labor intensive, visual/manual process just described is the only way to magnetically encode a check entering the nationwide, Federal Reserve regulated, bank check clearinghouse system. This process of visual/manual encoding is repeated millions of times each day by hundreds of people seated for hours at a time in front of machines to cause magnetic ink encoding of individual checks.
Not only is this a time-consuming, expensive process, it adds to the delay in the check collection process resulting in increased "float" which is an enormous expense to the banking industry and consequently to the public it serves. "Float" costs hundreds of millions of dollars each year. In order to speed the check collection process, the Federal Reserve requires by regulation that every bank cause the encoding of every check initially deposited with it. As a result every bank regardless of size has at least one encoding machine which cost approximately $7,500. Larger banks can have twenty, fifty or one hundred such machines each requiring an operator. Any product which reduces the labor intensive check clearing process or speeds the collection process, thus reducing float, should be a welcome product, supported both by the Federal Reserve and the banking industry.
From the time the current system was adopted, the industry has looked for ways to reduce this expensive, labor intensive process. Many approaches have been attempted and discarded. Most all of those approaches have been mechanical. If something is mechanical it can break down and require replacement or repair. If the writer of the check is to "encode" the check at the time of writing the check, then the product or device must be with the writer at all times, preferably carried as part of a checkbook. Such a device must be able to withstand abuse; for example, people put checkbooks in their back pockets and then sit on them. The device should be unbreakable, and have no moving parts. Obviously, it must be small--almost unnoticeable--if it is sometime to be carried on the person. It must be simple and easy to use, and not be a time-consuming, difficult process, otherwise the check writer will refuse to, or will improperly, "encode" his check. The public writes a preponderance of personal checks and most of these are written from booklets of twenty-five checks carried on the person, in a purse, billfold or other carrying case. A device to encode such checks should be inexpensive and disposable with the booklet when the checks are all used, or transferable to a new booklet. If it is to be carried with such a small booklet of checks, it must, as noted, be very thin, almost unnoticeable, non-breakable, highly accurate, easy to use and understand and not time-consuming to use.
Likewise, many checks are written from large check books--the checks are bigger and they come in booklets with checks often being three to a page. Checks of this nature can be hand written or machine written. A product for encoding the check amount must be adaptable to checks of this nature. As a matter of fact, the product must be adaptable to all checks entering the national banking system else the likelihood of the encoding system being adopted by the banking industry and the Federal Reserve system is most unlikely.
Further, the encoding system must also be adaptable to the encoding of "deposit slips". For example, when a customer deposits one or more checks with his bank, the customer fills out a deposit slip on to which he enters all individual checks and also the total of all those checks. Currently, when a check is manually encoded, the encoding machine automatically totals all checks included in an individual deposit. The operator of the encoding machine then encodes the "total" of the deposit. When the deposit slip goes through the encoding machine's "proofing" step, it compares the total of all checks with the total of the deposit to be sure there are no addition or other errors. If the depositor could personally encode his deposit slips and all checks when written were personally encoded, then no labor would be required to encode either checks or deposit slips. The machine would automatically read the amount of the checks and deposit slip and compare the total for error without the manual/visual labor intensive process.
A method of encoding could also be adapted for encoding other items, for example, mail pieces. Methods and apparatus for magnetic encoding of mailing pieces are known as disclosed in U.S. Pat. No. 4,210,339. However, this known process requires prior preparation of the mailing piece, or the affixing of something (as by glue) to a mailing piece, so that the mailing piece has either pre-printed, or affixed to it, guide markers or grids with numerical values.